Kindle Lone Wolf in Race to Drop E-Reader Prices

Amazon, although it is in a tug-of-war with Apple for the hearts and minds of publishers, may have a more immediate concern when it comes to other e-book rivals, such as Barnes & Noble and Borders: pricing. While Apple has staked-out the higher-end, the makers of the Nook and Kobe e-readers are rushing toward the lower-end, leaving the Internet retailer in a lonely position. However, Amazon could lower its Kindle’s $259 price tag very soon, one analyst suggests.

The Kindle could drop below $200 “before the end of summer,” according to Citigroup analyst Mark Mahaney. In May, brick-and-mortar bookseller Borders introduced the $149 Kobe e-reader, joining competition from Barnes & Noble’s Nook. The Nook in March forced Amazon to also find a retail partner, Target, to get the Kindle on the radar of non-Internet shoppers. Possibly forcing Amazon’s hand was a DigiTimes report that the Nook had captured more than half of the U.S. e-reader market.

The Nook placed even more pressure on the Kindle, when Barnes & Noble announced Monday it would cut to $149 the price of the Wi-Fi-only version of its e-reader and drop the 3G version to $199 from $259.

An additional reason why Amazon may soon lower the Kindle’s price came in May, when CEO Jeff Bezos told analysts a color e-reader that might better compete with Apple’s iPad was “still a long way out.” Also pointing to a possible sub-$200 Kindle was news a couple months ago from chipmaker Freescale that it was at the time about six months away from providing Amazon with new chips that could lower the e-reader’s price.

Mahaney did offer Amazon some hope against Apple. The Seattle-based Kindle e-book seller offered 88 percent of the New York Times’ best sellers versus 63 percent for Apple’s iBooks store.